While it’s true you won’t personally benefit from your policy, life insurance provides protection for your family or any other beneficiaries who may depend on your financial support. If you’re seriously thinking about buying life insurance but aren’t sure where to start, a Chartered Life Underwriter (CLU) can be a great resource for navigating the options available.
What is a Chartered Life Underwriter?
The definition of a Chartered Life Underwriter (CLU) is a financial advisor who specializes in life insurance and estate planning. Think of a CLU as a highly-specialized life insurance agent who can help you determine which life insurance policy is the best fit.
Every CLU must pass a series of rigorous courses and exams to receive the CLU certification, which is overseen by The American College of Financial Services. CLU certification ensures your advisor is highly qualified for handling complex transactions associated with life insurance, business planning and estate planning. Additionally, many CLUs are also fiduciaries, so they are legally obligated by the Securities and Exchange Commission (SEC) to act in your best financial interest at all times.
CLU vs Financial Advisor
There are several key differences between a CLU and a financial advisor:
Financial Advisor
A financial advisor is an umbrella term for any financial professional who helps you manage your money and investments. Advisors can help you in many different ways from making financial decisions and creating strategic plans to improving your overall financial health and managing investments. Financial planners are a commonly-known type of financial advisor that specializes in helping you create and meet long-term financial goals.
Financial advisors often specialize in a particular area and may hold a series of related licenses overseen by the Financial Industry Regulatory Authority (FINRA). One of the most common licenses is a Certified Financial Planner (CFP®). This designation means your planner has taken rigorous financial tests, completed intensive work experience and is held to the CFP Board of Standards code of professional conduct. Many advisors are also fiduciaries.
The cost of services for both financial advisors and financial planners can fluctuate greatly depending on fee structure and the service provided. Before working with a financial advisor, prepare your financial goals and a list of questions to help you determine if the advisor’s services fit your needs.
CLU
The main difference between a CLU and financial advisor is the extent of specialization. CLUs offer expertise in life insurance and estate planning. Because a CLU’s expertise is so specific, they can offer high-quality, targeted advice about insurance laws and policies to help you find an insurance policy to fit your personal and financial needs. A CLU can also assist you with submitting and tracking your life insurance application.
| CLU | Financial Advisor | |
| Board certification | Yes | Yes |
| Fiduciary duty | Yes | Yes |
| Services | Life insurance Estate planning Business planning | Comprehensive financial services |
| Fees | Commission from your life insurance premium Salaried employee Fee-only Hourly charges | Fixed fees Percentage of assets under management Performance-based fees Hourly charges |
How to Find a CLU
If you’ve decided to reach out to a CLU for advice, here’s where you can begin.
- Ask for referrals. Reach out to friends and family in good financial standing for referrals.
- Research online. Look online for reputable, local financial consulting firms with CLU-certified advisors on staff.
- Use professional websites. Designation Checkpoint is a website sponsored by The American College of Financial Services. Use your ZIP code to look up CLU-certified advisors in your area.
Is a CLU Right for Your Situation?
Both CLUs and financial advisors can help you manage your estate and plan for the future. Your choice between a CLU and a financial advisor should depend on your goals.
If your main goal is to improve your overall financial situation, a financial advisor’s services are likely a better fit for you. Financial advisors take a holistic approach to your finances and help you create a comprehensive program to meet your goals. Because financial advisors offer a range of services and advice, clearly define the advice needed and discuss the advisor’s qualifications and experience in that area. Working with a financial advisor can help you make better decisions, create strategic, long-term plans and improve your overall financial health.
More specific advice on buying life insurance, estate planning or guidance for legal issues such as wills and trusts requires the specialized skill set of a CLU. Their expertise ensures you can get the best life insurance rate possible.
Find the Right Professional
The event of your death will be an emotional time for your loved ones. Plan ahead by working with the right financial professional to be sure your financial affairs are in order.